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Workforce, pensions and training

11.02.16

'Significant failings' in Civil Service pensions administration

Civil servants experienced “hardship and distress” due to problems with their pensions after the company that administers the pensions brought in changes, a new NAO (National Audit Office) report has found.

In September 2014, MyCSP, which administers Civil Service pension schemes to 1.5m current and former public sector employees, brought pension payroll and some member administration services, which were previously provided by Capita under a Cabinet Office contract, in-house.

According to the NAO investigation, problems that followed included 14,703 pensioners who lived overseas receiving their pensions late in September 2014 and 99 not receiving their pensions at all; MyCSP failing to answer 99,400 calls from customers between September 2014 and March 2015; and a backlog building up which peaked at 22,000 urgent cases in January 2015.

NAO head Amyas Morse said: “Some people were paid late and members struggled to contact MyCSP. Some reported hardship and distress. MyCSP’s performance is now back to a steady state but the underlying data problems have still not been fixed. This should now be a priority for the Cabinet Office, MyCSP and the employers.”

To make the situation worse, MyCSP switched to a new ICT system, Compendia, shortly before the migration, which was not fully ready or properly tested at the time of the migration.

MyCSP has now cleared its backlog, increased its call centre staff from 59 to 100 and issued a joint improvement plan with the Cabinet Office.

However, members are still reporting problems in getting accurate and timely information about their pension entitlement.

The Cabinet Office has not imposed a financial penalty on MyCSP for its performance, although it did suspend contract service credits worth around £90,000 from 2013 to 2015.

The NAO produced five recommendations for the Cabinet Office and Civil Service Pensions Board, including working with employers and MyCSP to produce a plan as to how data will be cleansed and properly maintained and who will pay for it, continuing to reform the governance of the Civil Service pension schemes to ensure that employers are properly involved, and considering and disseminate the lessons from the migration and the subsequent problems for the wider programme of shared services across government.

In a statement, MyCSP said the problems were caused partly by a communication issued to 1.1 million members that led to an unexpected increase in calls, and that measures taken to address it included increasing enquiry centre opening times and establishing an in-house training academy.

It said: “MyCSP is pleased to confirm that, as detailed by the National Audit Office report, performance is now back to a steady state. Call handling levels have been back to normal for the past six months, with a corresponding reduction in member complaints, significantly down from their peak at the time of the service challenges.

“Service to members remains our utmost priority and we will continue to work with the Scheme Manager (Cabinet Office) and employers to deliver towards that aim.”

MyCSP became the first Whitehall mutual joint venture in 2012, with ownership shared between staff, the government and financial services firm Paymaster.

NAO criticised its governance and financial model when it was first launched.

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